You just won the grand prize in a national writing contest As your prize, you will...

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You just won the grand prize in a national writing contest As your prize, you will receive $2,000 a month for ten years. If y

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Answer 1

Answer #1

Present Value of Annuity (1+r) = PeriodicCash Flow *

where r is the rate of Return for compounding period = 11% / 12 = 0.91666666666% _ _ _ (Monthly)

n is the no of compounding period 10 years * 12 = 120 Months _ _ _ (Monthly)

1- 10 00916666CDbԱՄ = 2000 * - 0.0916666666

1-0.3345433095 = 2000 *二 0.00916666666

= $ 145,190.55

Today's Value is $ 145,190.55

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Answer 2

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